Sept. 2, 2021

This paid piece is sponsored by South Dakota Biotech.

The leaders of Big Cypress Acquisition Corp. formed their company for the purpose of merging with a promising biotech business and taking it public. Then, they needed to find it.

They had looked into dozens of biotech companies by the time they became connected to Sioux Falls-based SAB Biotherapeutics – the one that most closely met their criteria and became the focus of a process that’s expected to lead to listing on the Nasdaq before the end of the year.

“SAB stood out, and we got tremendously excited right away,” said Sam Reich, CEO, CFO and a board member of Big Cypress, the Florida-based special purpose acquisition company, or SPAC.

“We believe that SAB has a one-of-a-kind platform. Totally unique.”

Reich’s background enabled him to recognize that distinction right away. While pursuing his graduate degree from the University of Pennsylvania, the molecular biologist made several inventions around RNA therapeutics. He was a biotech entrepreneur from the start, raising venture capital from big names such as the venture capital arm of Johnson & Johnson and going through a process similar to the one he’s leading now to enable his venture-backed company to become a publicly traded company.

“That was a very successful outcome for our shareholders and a very rewarding transaction,” he said.

Then, he connected with a Harvard University professor of neurology who had developed a novel epilepsy drug. The process of advancing the potential new drug toward clinical trials and commercialization began again.

By the fall of 2020, Reich’s kids were headed back to school in Florida after pandemic-related home schooling, and he was looking for his next opportunity.

“I started talking to my friends and colleagues I’d worked with for many years in biotech, and we founded Big Cypress with the goal of helping capitalize an exciting new company and bringing it to the public markets,” he said.

The company’s team, which includes decades of expertise in drug development and related fields, was looking for a therapeutic company that had been through safety testing but had not yet reached commercialization.

“We wanted a clinical-stage company, and we were looking for a strong management team that was expert and capable of executing on the business plan,” Reich said. “And we were looking for exciting opportunities addressing unmet medical needs, important disease areas where there’s a big need for new medicines – a company that was ready to be public … should be public and was expected to be well-received by the public markets.”

They looked at about 60 companies and were well into due diligence on nine of them when SAB emerged as the company of choice.

Its DiversitAb platform uses advanced genetic engineering to leverage cattle to produce fully human polyclonal antibody therapeutics with the potential to treat a wide range of immune system disorders, cancer and infectious diseases without the need for human donors.

“As a molecular biologist, I understood polyclonal antibodies and the potential therapies that SAB has a strong foothold in,” Reich said. “I believe that SAB has the ability to make targeted, highly potent human polyclonal antibodies for therapeutic use at a large scale – the only company in the world that can do that without using human plasma donors. They were unique and had this valuable capability no other company to our knowledge has.”

The science behind it is “tremendously impressive,” he added. “It was really refreshing. A lot of what you look at in biotech starts to blend together and looks very similar. This was a very advanced platform, which is very hard to find.”

It’s a broad platform that is expected to be applied to numerous disease areas, Reich continued.

“The potential for creating value goes far beyond one drug,” he said. “And we believe they have the competence to execute it and the proprietary ability to block others from copying it. We see this as a one-of-a-kind opportunity, and it stood out.”

Big Cypress liked SAB’s Midwest location too, Reich added. The team showed a strong work ethic, pioneering spirit and advanced protein production systems, “combined with the highly advanced biological and genetic science more often associated with the coastal biotech centers,” he said.

At SAB, CEO Eddie Sullivan and his team also had been considering going public as the next stage of its growth.

“What I found appealing about the Big Cypress team was both the background Sam and his colleagues have in science, finance and drug development and the fact they were a SPAC team looking outside the box a little bit, looking at market conditions and what’s happening today and finding a unique pathway forward,” Sullivan said.

“We are also very much out-of-the-box thinkers and enjoy really trying to find innovative ways to do things, and that’s what we found in Big Cypress. The timing was just right. We were prepared, and they were prepared.”

At the same time, SAB continues to move forward on multiple therapeutics in clinical trials, including SAB-185, its therapeutic candidate for the virus that causes COVID-19. It’s in the later stages of clinical trials, and patient enrollment has been ramping up as COVID infections are again surging, Sullivan said.

“So that’s very encouraging,” he said, adding the trial doesn’t yet have enough data to seek emergency use authorization through the FDA, but it’s a possibility especially because of the treatment’s ability to target variants of concern, including the Delta variant now ravaging many parts of the world.

When Big Cypress began working with SAB, the thought was that the pandemic was winding down, Reich added.

“We were almost discounting SAB-185. We said it looked to be a great proof-of-concept and showed the FDA and the scientific community this could be a viable path to a drug, but then after the merger agreement was signed, Delta surged, and all of a sudden we were striking a deal with a company that has a potentially very important therapeutic for this continuing pandemic,” Reich said.

“As more variants emerge, other therapeutics may become obsolete. But we believe that SAB’s candidate, using targeted, highly potent polyclonal antibodies that leverage the body’s natural response to viruses, may have more potential to neutralize emerging variants, and early data recently published by the FDA shows just that.”

SAB also is continuing to support its therapeutic for influenza that is in Phase 2 clinical trials, Sullivan said.

The merger process is expected to close in the fourth quarter if all stays on track. SAB plans to be listed on the Nasdaq with a post-merger value of approximately $325 million, or $10.10 per share, and the closing is expected to provide the combined company with $118 million of pro forma cash to fuel development and commercialization of the SAB platform technology, assuming no redemptions from the Big Cypress SPAC investors.

Sullivan, who has hosted Reich in Sioux Falls three times in the past month, emphasized that the operation plans to continue to be based here.

“The facilities and the location are excellent – superb – really as good as I’ve seen, and I’ve toured a lot of facilities,” Reich added. “Most biotech companies use contract labs for much of their work. SAB has infrastructure, has a footprint in the Sioux Falls area, which is a big component of the value here. They’re also a very strong team. I’ve met many employees who are really hardworking, smart people who are extremely dedicated to the company and the mission.”

The deal itself is significant in validating South Dakota’s ability to take a homegrown biotech company through going public and potentially commercialization, said Joni Ekstrum, executive director of South Dakota Biotech.

“We couldn’t be more excited for SAB and this next chapter in its growth story,” she said. “Becoming a public company is going to mean so many more opportunities for SAB, its team and ultimately the state. It’s a deal that will put us that much more on the map as a growing hub for bioscience activity.”

SAB has the potential to be well received by the market, Reich added.

“I think as SAB becomes public, has access to capital and as its therapeutic candidates are developed, it could be a great opportunity for people in Sioux Falls,” he said.

“We’re looking forward to seeing robust growth, with an accompanying need for more people and more square footage here in Sioux Falls.  And that could be great for local business, the economy and ultimately provide a potential positive impact for patients.”